Chubb Group of Insurance Companies released a new package of insurance policies for community banks to help minimize coverage gaps through an integrated mix of six coverages tailored to each customer’s needs.
Chubb’s ForeFront Portfolio for Community Banks consists of insurance policies for directors and officers liability, bankers professional liability, employment practices liability, fiduciary liability, outside directorship liability and lender liability. In addition to being able to select which of the coverages they would like to purchase, customers can choose to have separate limits for each coverage, opt for an aggregate limit for all the coverages, or combine coverages under aggregates as the needs of the bank require. Chubb will market this package of coverages to community banks with assets of $1 billion or less that operate in a small geographical area.
According to Chubb representatives, community banks face a growing number of diverse risks. The proliferation of federal and state employment regulations makes claims by employees more common and more costly. The Employee Retirement Income Security Act of 1974 (ERISA) creates significant fiduciary accountability. Fee-based professional services that do not meet customer expectations can trigger professional liability lawsuits. Under the Sarbanes-Oxley Act, the federal government is imposing strict corporate governance requirements on banking institutions, including community banks, which can lead to claims against directors and officers, as well as the institution.
“No business is immune to these and other liability exposures, and with new regulatory measures and a growing number of lawsuits, community banks are vulnerable,” Jeffrey J. Brown, ForeFront product manager for Chubb’s Department of Financial Institutions, said.
Other key features of ForeFront Portfolio include:
* Duty to defend coverage;
* Experienced national and regional law firms that specialize in the six coverage sections are retained;
* Automatic coverage for newly acquired subsidiaries;
* Non-cancellation except for nonpayment of premium; and
* One simplified application for all coverages.
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